Traditionally VC’s have stayed away from the cosmetics industry because of the high costs of entry, but with more DTC brands, a high level of acquisitions and emerging technology is causing investors to take a second look a beauty. Making now the right time for beauty VC 2022. VC isn’t right for every one and every founder but when used properly it can be a great tool.
Reasons to Raise
- You are overwhelmed by orders and cannot keep up with demand.
- Or you just got a large contract and need support meeting that
- You want to expand into other markets
- You are doing something tech focused and your business model has:
- low barriers to entry
- is contingent on having lots of users
- You are first to market.
- You have some kind of IP
- You are looking to automate some of your processes
- You discovered a way to turn x dollars into 5x+
Don’t raise if...
- You don’t have a good reason to
- You don’t want to give up control of your company
- You don’t want to ever sell your company (There are types of investment vehicles that allow you to continue in your company for ever but that’s not typical VC)
- You built your company so you can live your life a particular way. Such as
- Have more free time/Time to take care of dependants
- You want to choose who you work with all the time.
- You don’t want constant pressure to grow your company
Proceed with caution if...
- You founded your company based on some kind of ethical conviction
- Investors are in the business of making money
- Really research the firm and make sure they are aligned with you.
If you are interested in raising here are some good Resources.
US VC Valuations Report:
- more money is going to startups.
- More Vcs in earlier stages
- More IPOs
- https://pitchbook.com/news/reports/q1-2021-us-vc-valuations-report
How rolling funds and syndicates work:
VC Not only survived by thrived in 2020:
- How the pandemic affected VC
- https://www.axios.com/newsletters/axios-pro-rata-ec55fc8c-2439-4739-90ee-aea3d799d93c.html?chunk=0&utm_term=emshare
Cosmetic Brand M&As are at an all time high. Is the bubble going to pop?
Us based VC funds investing in beauty
- https://pitchbook.com/blog/6-us-vc-firms-investing-in-beauty
Beauty VC- VC funds that invest in the beauty space
- This article was written by Nivea accelerator.
- They are a south Korean beauty accelerator focusing on brands a technology companies located in south Korea (or those looking to expand)
- https://nivea-accelerator.medium.com/beauty-investors-vc-firms-and-angels-to-know-4bc7aea825d7
Beauty companies are beginning to get investors attention:
- While traditionally VC’s have stayed away from the cosmetics market because of the high costs of entry. DTC and technology companies are changing this and making investors take note.
https://news.crunchbase.com/news/beauty-cosmetics-startups-vc-investment/Beauty VC- VC funds that invest in the beauty space
10 top US VC firms investing in beauty right now:
What venture capitalists look for when they invest:
- if you are fundraising it is important to get the right kind of investors. Most VCs focus on technology. so be sure you find someone in the cosmetics space.
- https://www.allure.com/story/how-to-get-venture-capitalist-funding-beauty-brand